Security Market Outlook

Companies in the security systems services industry sell, install and monitor commercial and residential electronic security systems. According to First Research, Raleigh, N.C., the 50 largest companies in the industry generate about 60 percent of the revenue.

Electrical contractors will have many opportunities in the years ahead. The Homeland Security Research Corp. (HSRC), Washington, D.C., forecast the top 10 leading Homeland Security sectors—including airport, port and maritime security, information technology (IT) security, perimeter and border protection, and cybersecurity—to reach more than $8.5 billion cumulative five-year revenues by 2011 alone. HSRC reports that, over the next four years, funding in the United States for homeland security by federal, state, and local governments and the private sector will increase from 2011 levels of $184 billion to $205 billion by 2014. The market will grow from $73 billion in 2011 to $86 billion by 2014.

Another bright spot is network security. The global network security market, described as hardware and software with functionality that includes firewalls, virtual private networks, intrusion prevention and detection, and multipurpose security known as unified threat management, is expected to show revenues of more than $8 billion in 2011, 8 percent more than 2010, according to Network World, Southborough, Mass.

While economic pressures reduced demand in banks and retail applications for video surveillance products, the government and transportation sectors, especially airports, have grown to help pick up the slack, said Sergio Collazo, national sales and marketing manager for Toshiba Surveillance & IP Video Products, Irvine, Calif. However, the slide in demand was more pronounced in analog equipment than in Internet protocol (IP) network equipment.

According to Christopher Johnston, product marketing manager for Bosch Security Systems Inc., Fairport, N.Y., the trend in video surveillance will be toward higher resolution and the adoption of high-definition (HD) cameras and monitors, which requires more bandwidth to transmit and support.

“Security system integrators, such as potentially electrical contractors, need to get their customers to understand the breadth of issues that must be addressed when converting to new high-resolution technologies and educate customers to think of the security video system as a whole from image capture through display and storage,” Johnston said.

These customers are driving the market to provide the video technologies that will achieve the more detailed images required to improve security and protect assets.

“End-users also want to download images to DVDs or thumb drives to give to law enforcement. The idea is that more detailed information gained by better control of images will increase the odds for a more successful outcome,” Johnston said.

If an electrical contractor wants to enter the security market today, it needs to know and understand IP.

Electrical contractors also need to ignore the misconception that the IT staff has taken over video surveillance because of the growth in IP technology. In reality, it’s just that video equipment today acts more like IT products.

“I encourage contractors to provide a true consultative effort with the customer and to think of the security market in the long term,” said Dale Hull, director of sales for Federal Signal Safety & Security Systems, University Park, Ill.

Integration of the security system with other building systems is another area in which the electrical contractor will play a key role in the years ahead.

“Electrical contractors that learn how to speak the language of the IT world, [that] begin to understand the basics of network design and how all the security system components are affected by bandwidth, and [learn] what the needs of IT personnel are, can leverage their low-voltage experience and presence in the building to capture market share,” Johnston said.

To make strides in the security market over the next few years, electrical contractors need to expand their expertise across the different segments, including intrusion, access, video and mass notification.“By getting the appropriate training and certification in both the physical and network security segments, the contractor can effectively demonstrate the impacts of the proposed technology to both building managers and IT personnel,” Johnston said.

BREMER, a freelance writer based in Solomons, Md., contributes frequently to ELECTRICAL CONTRACTOR. She can be reached at 410.394.6966 and darbremer@comcast.net.